Safe and Sound

COMMUNITY BANK OF SNYDER

Snyder, TX
4
Star Rating
COMMUNITY BANK OF SNYDER is a Snyder, TX-based, FDIC-insured bank dating back to 1905. As of December 31, 2017, the bank held equity of $11.9 million on assets of $118.2 million.

With 26 full-time employees, the bank holds loans and leases worth $46.8 million, including real estate loans of $35.5 million. U.S. bank customers currently have $105.8 million in deposits with the bank.

Overall, Bankrate believes that, as of December 31, 2017, COMMUNITY BANK OF SNYDER exhibited a good condition, earning 4 out of 5 stars for safety and soundness. Here's an analysis of how the bank did on the three major criteria Bankrate used to score American banks.

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THE INSTITUTION'S SCORE

Capital Score

Capital acts as a bulwark against losses and provides protection for account holders during periods of economic instability for the bank. Therefore, when it comes to measuring an a bank's financial strength, capital is key. When it comes to safety and soundness, the more capital, the better.

COMMUNITY BANK OF SNYDER received a score of 12 out of a possible 30 points on our test to measure the adequacy of a bank's capital, less than the national average of 13.13.

One widely followed measure of this buffer is a bank's Tier 1 capital ratio. COMMUNITY BANK OF SNYDER's Tier 1 capital ratio was 18.29 percent, higher than the 6 percent level regulators consider adequate, but less than the national average of 25.65 percent. The higher the capital ratio, the better the bank will be able to weather financial challenges.

Overall, COMMUNITY BANK OF SNYDER held equity amounting to 10.05 percent of its assets, which was lower than the national average of 12.03 percent.

Asset Quality Score

This test is intended to try to understand how the bank's loan loss reserves and overall capitalization could be affected by problem assets, such as unpaid mortgages.

A bank with large numbers of these kinds of assets may eventually have to use capital to cover losses, shrinking its cushion of equity. Many of those assets are also likely to be in non-accrual status and no longer earning money, resulting in lower earnings and potentially more risk of a future failure.

COMMUNITY BANK OF SNYDER scored 40 out of a possible 40 points on Bankrate's asset quality test, beating the national average of 37.49.

The percentage of problem assets a bank holds compared to its total assets is a handy indicator of asset quality.As of December 31, 2017, none of COMMUNITY BANK OF SNYDER's loans were noncurrent -- in other words, they were more than 90 days past due or were in non-accrual status. That's below the national average of 1.01 percent.

Banks keep a reserve known as an "allowance for loan and lease losses" to deal with problem assets . Comparing the reserve's size to the total amount of problem loans can be a helpful indicator when evaluating a bank's ability to manage troubled assets. Unfortunately, the FDIC did not provide information on COMMUNITY BANK OF SNYDER's loan loss allowance in its most recent filings.

Earnings score

How profitable a bank is affects its long-term survivability. Earnings can be retained by the bank, giving a boost to its capital cushion, or be used to deal with problematic loans, potentially making the bank more resilient in times of trouble. Obviously, banks that are losing money have less ability to do those things.

COMMUNITY BANK OF SNYDER fell short of the national average on Bankrate's test of earnings, achieving a score of 12 out of a possible 30.

One key way to measure a bank's earnings is return on equity, calculated by dividing net income (profit, essentially) by total equity. The most recent annualized quarterly return on equity for COMMUNITY BANK OF SNYDER was 5.68 percent, below the national average of 8.10 percent.

For the twelve months ended December 31, 2017, the bank earned net income of $664,000 on total equity of $11.9 million. The bank reported an annualized return on average assets, or ROA, of 0.59 percent, below the 1 percent deemed satisfactory in accordance with industry standards and below the average for U.S. banks of 1.00 percent.

WHAT IS SAFE & SOUND?

Bankrate.com's Safe & Sound Ratings provide a star rating system to evaluate the current financial status of financial institutions. The information gathered about banks, credit unions and thrifts is updated as set forth in the Terms of Use of Safe & Sound Ratings and Reports. The Safe & Sound Ratings information is grouped by categories of banks, thrifts and credit unions.

Scoring methodology

Bankrate.com evaluates the financial condition of institutions and assigns a one- to five-star rating for each with five stars representing the highest rating. Institutions with satisfactory performance will generally receive a rating of three or more stars. The majority of institutions fall into the three- to four-star range. An institution with an "NR" rating may be too new to rate or may have limited the publicly available information in their regulatory filings. The "NR" is not an indication of financial strength or weakness. The Safe & Sound rating is believed to be reliable, but the information is not guaranteed. In addition, events since the information was collected may have altered the institution's financial condition.